Sarah Haines

Great deals on procurement from buying groups

What can you do to keep your operating costs down? Will a buying group save your business money?

Are you one of the businesses that seeing their margins constantly shrinking as their suppliers continue to increase prices? Current fuel prices are often blamed for increasing prices as costs to manufactures and distributors all skyrocket. Finding solutions that keep your costs down can be essential to the survival of your business. One of the easiest ways to negotiate a better price from your suppliers is to buy in bulk.

We all know that when you buy in bulk it is not only your costs, but your suppliers costs that are reduced. Your supplier will then be able to organise their own bulk discounts with their suppliers. This means the cost of manufacturing the products you require is lower and it can even make transporting the goods to you cheaper. This all falls down though when you look at the prospect of tying up cash in a larger order than you currently need.

A solution that is proving to be increasing popular with businesses across a broad range of industries is to join a buying group. A buying group purchases on behalf of many different companies in your industry. As a buying group is purchasing not just in your behalf, but also for many very similar companies they are able to negotiate bulk buying discounts that would never be available to you.

Specialising in a specific area allows buying groups to form a real expertise in their chosen area. This specialisation gives the buying group a chance to build good relationships with suppliers in their area and to use that to get their members better prices.

If you look online you are sure to find a buying group for your industry with everything from procurement for care homes to procurement for hotels. Industry publications are another great source of information on buying groups. If you are still struggling then perhaps your industry is one of the unlucky ones where none exist, why not contact some similar companies and try and form your own?

With your next purchase, try a buying group for yourself. Get the best price your existing supplier offers you and compare it to the results of a buying group. After that simple exercise I suspect your business will soon be a member of a buying group!

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